Google Extends Upside Web Earnings Parade

Posted by: Rob Hof on October 18, 2007

Like Yahoo! and eBay did earlier this week, Google reportedthird-quarter earnings that outstripped expectations. Google said profit rose 46%, to $1.07 billion, or $3.91 a share, on a 57% rise in sales, to $4.23 billion, or $3.01 billion minus traffic acquisition costs. Analysts had expected $3.78 a share. Google’s stock was up about 1% soon after the report in after-hours trading, even though it has already risen by about $100 in the past month.

CEO Eric Schmidt said the search quality investments Google has been making have paid off, especially overseas. That has driven more click-throughs on ads, which means more revenue for Google.

That said, Google continued to hire a heckuva lot of people—2,130 in the third quarter alone, for a total of 15,916. (I don’t believe it either….) It’s early on the conference call, but perhaps that was a factor in the profits growing more slowly than sales.

I’m sorry to be missing a lot on the conference call because, well, I’m at a conference, and a noisy one, but one question caught my ear. An analyst asked if Google felt obligated to buy Facebook or another social network. Schmidt wouldn’t say directly, but added: “I want to assure you that the cash is not burning a hole in our pockets.”

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BusinessWeek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, Douglas MacMillan, and Spencer Ante dig behind the headlines to analyze what’s really happening throughout the world of technology. One of the first mainstream media tech blogs, Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.